Correlation Between Cass Saddle and AFRICAN DISTILLERS
Can any of the company-specific risk be diversified away by investing in both Cass Saddle and AFRICAN DISTILLERS at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Cass Saddle and AFRICAN DISTILLERS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cass Saddle Agriculture and AFRICAN DISTILLERS LIMITED, you can compare the effects of market volatilities on Cass Saddle and AFRICAN DISTILLERS and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Cass Saddle with a short position of AFRICAN DISTILLERS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cass Saddle and AFRICAN DISTILLERS.
Diversification Opportunities for Cass Saddle and AFRICAN DISTILLERS
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cass and AFRICAN is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Cass Saddle Agriculture and AFRICAN DISTILLERS LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AFRICAN DISTILLERS and Cass Saddle is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Cass Saddle Agriculture are associated (or correlated) with AFRICAN DISTILLERS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AFRICAN DISTILLERS has no effect on the direction of Cass Saddle i.e., Cass Saddle and AFRICAN DISTILLERS go up and down completely randomly.
Pair Corralation between Cass Saddle and AFRICAN DISTILLERS
Assuming the 90 days trading horizon Cass Saddle Agriculture is expected to generate 1.2 times more return on investment than AFRICAN DISTILLERS. However, Cass Saddle is 1.2 times more volatile than AFRICAN DISTILLERS LIMITED. It trades about 0.2 of its potential returns per unit of risk. AFRICAN DISTILLERS LIMITED is currently generating about 0.01 per unit of risk. If you would invest 230.00 in Cass Saddle Agriculture on August 31, 2024 and sell it today you would earn a total of 149.00 from holding Cass Saddle Agriculture or generate 64.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cass Saddle Agriculture vs. AFRICAN DISTILLERS LIMITED
Performance |
| Timeline |
| Cass Saddle Agriculture |
| AFRICAN DISTILLERS |
Cass Saddle and AFRICAN DISTILLERS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cass Saddle and AFRICAN DISTILLERS
The main advantage of trading using opposite Cass Saddle and AFRICAN DISTILLERS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cass Saddle position performs unexpectedly, AFRICAN DISTILLERS can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in AFRICAN DISTILLERS will offset losses from the drop in AFRICAN DISTILLERS's long position.| Cass Saddle vs. STAR AFRICA PORATION | Cass Saddle vs. CAFCA LIMITED | Cass Saddle vs. FIRST MUTUAL PROPERTIES | Cass Saddle vs. AFRICAN DISTILLERS LIMITED |
| AFRICAN DISTILLERS vs. STAR AFRICA PORATION | AFRICAN DISTILLERS vs. CAFCA LIMITED | AFRICAN DISTILLERS vs. FIRST MUTUAL PROPERTIES | AFRICAN DISTILLERS vs. TANGANDA TEA PANY |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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